Council takes skeptical role on pensions Members tell Gary to prove that system needs overhaul

'Case is not yet complete'

Proposal would vastly change $750 million retirement system

July 17, 1996|By Scott Wilson | Scott Wilson,SUN STAFF

For the first time in months, the County Council is stepping out from the shadow of the Gary administration, to the applause of demoralized county employees.

In the past week, red-and-white bumper stickers have appeared on fenders and at bus stops that read: "Want to meet a disgruntled employee? Call 911."

The grim message is the result of the Republican administration's months-long campaign to cut personnel costs, which account for 75 percent of county spending. Public safety unions won next to nothing at the bargaining table last spring.

After handing County Executive John G. Gary a series of legislative victories in the past three months, council members are debating an administration measure to reform Anne Arundel's $750 million retirement system.

But an aggressive council is demanding more from the administration than it has in the past. On Monday, administration officials introduced 20 changes to the complex pension legislation in an attempt to make it more palatable to the seven-member council.

"I think what we've done here is say this is going to be a level playing field. Period," said County Attorney Phillip F. Scheibe. "All employees are going to be treated the same way."

In the past two weeks, several council members, particularly two of the panel's three Democrats, have pressed administration officials for proof that the retirement system is headed for a "train wreck."

Now council Republicans, including three who will constitute a crucial voting bloc, are balking at what they describe as a blurry administration argument for sweeping reform. The bill would eliminate guaranteed cost-of-living raises for retired workers, and create a less generous pension plan for new employees.

"I think that their case is not yet complete," said Councilman John J. Klocko III, a Crofton Republican. "They need to establish the need for these changes in a clear and concise way. I'm not convinced there is a crisis on the horizon."

The council has hired a lawyer to decipher the 41-page bill, just as the administration hired a Baltimore law firm to help draft it. Now council members are considering paying an outside actuary to review administration figures, which have been moving targets in recent weeks.

Different administration projections show that the retirement fund is liable for $75 million to $129 million in current and future pension payments. The numbers vary with the different factors used in calculations, most notably the mortality rate of retired workers.

Projected county savings from the bill also have varied. Actuarial reports show that the council would have to cut $2.5 million this year from the county's $754 million budget if the pension system is not changed. Finance officials have predicted that the reforms they have proposed would save Anne Arundel $3.4 million this year, and as much as $6 million in future years.

County officials say the "train wreck," which has been the administration's metaphor for the pension plan, will result if Anne Arundel continues setting aside 28 percent of its payroll to cover retirement benefits. In the next eight years, officials predict, the 1,100 retired county employees will double in number.

"If that trend continues, this government will not survive," Scheibe said. "They want evidence of a train wreck. That's evidence enough."

But the shifting figures have exasperated council members. Observers inside the council say that the deciding votes will come from Republicans Diane R. Evans, Bert L. Rice and Klocko. The administration will likely need two of those three council members for the bill to pass.

Now six weeks before the bill expires without council action the votes are up in the air.

"The administration has jumped into the middle of this bill without explaining what they want to accomplish," said Evans, the Arnold Republican who chairs the council.

The administration's proposed amendments would cap the annual retirement benefit for the county's highest-paid officials at 60 percent of their final salary. Without that change, the bill would allow the roughly 40 "appointed and elected" officials to earn a 70 percent benefit, 10 percentage points more than that received by the rest of Anne Arundel's 3,500-member work force.

Another amendment would not allow those same top officials to receive pension credit for military service.